It’s a big day for eBay and CEO Jon Donahoe. The company is laying off 10% of its workforce, or about 1,000 employees plus several hundred temporary positions. They will take a $70 million to $80 million restructuring charge around the layoffs, they said.
And they’ve made two acquisitions: Denmark’s DBA for $380 million and Amazon-funded Bill Me Later for $820 million in cash and approximately $125 million in outstanding options.
Regarding the two acquisitions: We covered dba.dk, Denmarks’ leading classifieds site, earlier this morning. Bill Me Later, the larger acquisition, is a service that let’s ecommerce partners issue instant credit to buyers. You enter your birth date and last four digits of your social security number online, and it does a credit check on you in three seconds to determine whether you are worth the risk. Bill Me Later pays the merchant, and sends you a bill. The company has raised a ton of cash – at least $272 million – from Amazon, Azure Capital Partners, Chase Paymentech, Crosspoint Venture Partners, First Data Corp., and others.
eBay stock is at a 52 week low, we’ll see how it does in the market today. (Update: well, the markets are tanking, so it’s not really a good day to judge eBay alone).
Bill me later is a smart move. I wonder if the acquisition is because of the country’s financial state, or if Ebay has been wanting to do this for a long time.
Will it payoff for Ebay…
Since it is rumored that they want to get rid off Skype and StumpleUpon.
eBay could have build a service like BillMeLater and add it to PayPal. But apparently, such logical steps are too difficult for eBay’s CEO. Instead of that eBay buys Skype, StumbleUpon and the stock price continues to decline.
I wonder whether eBay reads any newspapers, what the current economic situation is. Otherwise eBay would not have paid such sums.
whoever has cash now can buy cheaper and solid assets, which ebay is doing.
1. When building a company, you rarely want to build everything (you can’t!) – lots of ideas won’t fly. Many companies testing the market, executing on it and the a bigger company acquiring it is a good way to do business. A working team behind an idea oftentime is more important than the idea itself.
2. Look at a calendar. Skype was bought 3 years ago, StumbleUpon a year and half ago. The recession has been going on for only a few quarters.
good move from ebay to get onto BML
Wow ! 10% staff laid off to fund the acquisition of two companies ? Will they lay off more in DBA and BillMeLater going forwards ?
Given the current economical climate I feel sorry for Ebay’s staff !
eBay has plenty of cash to fund acquisitions. The timing has more to do, I suspect, with wanting to dump all the one time expenses in a single quarter.
I second the thoughts about eBay’s staff — especially since more than likely it will not be the truly “deserving” ones who are laid off.
-Alan
Brilliant Move deeper into the Finance Business.
This is a really good move for eBay gives them a chance to get all of those people who use Bill Me Later and add it to their huge Paypal empire..
It’s a very smart buy
“eBay stock is at a 52 week low, we’ll see how it does in the market today.”
They’re ALL at a 52 week low. The stock has not moved. I’m holding RHT for a rally.
Dumb move even at a reasonable price (you could by Cybersource for about the same amount and get $220 million in revenues this year). There’s no synergy like there was with Paypal.
Arrington, please find out why Sun Microsystems is in the hole worse than anybody else. Their stock is worth less than 1/4 of what it was a few months ago.
Why are they sinking worse than everybody in the tech industry???
Can you use your research powers to find out please?
Jobs… down the toilet, in a growing company. Strange times indeed!
They will keep all the employees of dba.dk, which is about 300…! Funky fact: Ebay bought Skype, which was also a danish company!:)
eBay does a great job at managing growth, less so at in-house innovation. PayPal could have easily built a bill me later like product but it would have never passed the tight lipped risk folks. PayPal has never focused enough on the consumer needs and I am not surprised they are paying a premium for bill me later. That being said I think it is a great acquisition, with tremendous synergies with PayPal’s core business. I just hope they don’t try to convert all those bill me later users to eBay buyers.
The auction business is a cash cow, eBay should take the money and invest it elsewhere.
Any news of the short selling freeze being extended to tech stocks?
now have to buy ebay stock, buy who can!
I never heard of ebay laying off people
PayPal already had a “Pay Later” feature folks. So the folks saying they should have just built thier own…they did. Buying BML was a smart move but maybe not timed the best.
Analysts need to think of “eBay” as “PayPal” and get over that piece of the pie’s slowing numbers. For eff sakes, you cannot grow too much after you have saturated the market.
Now would be a good time for an eBay and Amazon merger – Amazebay or eBamazon.
Harry “that would be interesting indeed” Wang
eBay is just positioning themselves for the future. They’ve already given up on auctions (and small sellers) so they need to get a lot better at fixed-price retail.
ebay still needs another lay off 20%.
More stupid acquisitions by this clueless company. I mean seriously, almost a billion dollars for BML? Someone tell me this is a joke?
You are saying this with specific knowledge of BML’s revenues right? Not just making assumptions…
this aint stumbleupon or some crap commodity webanalytics company
get a grip
It is brilliant move (like said winghom and crazyglues), because Bill Me Later scheme was really different from Paypal scheme. Who is the next acquisition by Ebay : Amazon Payments ? Obopay ?
It’s like not being able to look away from a car wreck.
Very good move. They are making very powerfull moves…
850 million on a site that you could easily replicate. Dumb, reminds me of when aol bought bebo for 850 milion cash.
ORLY? with demonstrable revenues? you should just replicate it yourself dipshit. Hell of alot harder than buying domains and spamming clog comments
You dont know the steps or anything about the online payments industry
please go back to what you know, commenting ignorantly
and dont just talk about seesmic and “substance” tell me what you know of online payment and payment gateways
They didn’t buy the technology, they bought the agreements with all those big retailers. Or do you think big sites would offer their users: “hey you can pay later using paymelater or paypal later”
Frank and Alex,
This is entertaining stuff!
These days is it really a good idea to spend almost $1B on a company that has to do with letting people by now and pay later? Is there a chance that some people will soon stop paying their “bill me later” bills? Just asking…
Will eBay make the acquisition payment later too? LOL.
lol
That’s “… and approximately $125 million in outstanding options”.
BillMeLater lost a partner. As some predicted, Amazon.com severed the relationship.
http://www.vend...elater-in-2009/